Fourth and Inches: New Mortgage Relief Guidelines Are Important but Fall Short
January 28, 2010
Contact: Madeline Meth
The U.S. Treasury today released important new guidelines to mortgage service companies responsible for modifying home loans held by responsible but financially pressed homeowners under the Obama administration’s Home Affordable Modification Program, or HAMP. The new HAMP guidelines are a solid improvement for homeowners at risk of foreclosure because of a simplified application process, but the new rules unfortunately fall just short of really streamlining the process through which eligible borrowers can receive permanent changes to their loans in order to continue to pay on their mortgages and stay in their homes.
The new guidelines—known as Supplemental Directive 10-01—provide a big step forward in terms of simplifying documentation requirements and mandating a timeframe in which mortgage service companies must respond to borrowers’ requests for mortgage modifications. Yet even as the directive sets out clear obligations for timely responses from servicers—acknowledgement of receipt within 10 days of a borrower’s request for modification and a requirement for a decision on a modification within 30 days—the lack of penalties for servicer noncompliance or a true appeals process is disappointing.
Andrew Jakabovics is associate director of housing and economics at the Center for American Progress. To read more about the Center’s foreclosure prevention and housing finance reform proposals, please go the Housing page on our website.
To speak with our experts on this topic, please contact:
Print: Katie Peters (economy, education, poverty, Half in Ten Education Fund)
202.741.6285 or firstname.lastname@example.org
Print: Anne Shoup (foreign policy and national security, energy, LGBT issues, health care, gun-violence prevention)
202.481.7146 or email@example.com
Print: Crystal Patterson (immigration)
202.478.6350 or firstname.lastname@example.org
Print: Madeline Meth (women's issues, Legal Progress, higher education)
202.741.6277 or email@example.com
Spanish-language and ethnic media: Tanya Arditi
202.741.6258 or firstname.lastname@example.org
TV: Lindsay Hamilton
202.483.2675 or email@example.com
Radio: Chelsea Kiene
202.478.5328 or firstname.lastname@example.org